January 2022 Gasoline Phaseout News

The Importance of Strategic EV Incentive Design

Q: Is there a smarter way to structure EV incentives? A: Yes!

The goal of electric vehicles is to displace gasoline use. But not all EVs are the same – the extent to which an EV cuts gasoline consumption depends on how much gasoline the driver was using before switching to an EV. 

Coltura is urging state officials to focus EV research, incentives, and outreach on finding the drivers burning the most gasoline. In other words, incentivize high-use drivers to switch to EVs first. These “gasoline superusers” are much more likely than current EV buyers to be lower and middle-income drivers, so offering these drivers strong incentives both advances equity and helps ensure maximum gasoline displacement for every government dollar spent on EV incentives.

Currently, most EV buyers are eligible for a federal tax incentive of $7,500. On top of that, thirteen states have EV purchase incentives, and many are quite generous:

• Oregon doubled its principal EV rebate program and is now offering up to $7,500 in cash rebates for low and moderate-income households buying new or used EVs costing under $50,000.
• California Governor Newsom’s budget has $256 million in new EV incentives. 
• In Washington, Governor Inslee is proposing new EV incentives of up to $7,500, which, if passed, would amount to the most generous among currently enacted state EV subsidies.

Coltura’s Gasoline Superusers report makes it clear: it’s a much bigger win for the climate, air quality, and the family pocketbook when a Superuser – say, a rural truck driver who logs 30,000 miles a year – switches to an EV, over a switch by an urban dweller who only uses their small car for the occasional grocery run.